Theresa May making her speech on Brexit last week.
Photograph: Rex Shutterstock

A powerful cross-party group of MPs is plotting to thwart Theresa May’s attempts to drive through a hard Brexit amid rising fears that UK businesses could soon have to pay huge export tariffs on goods they sell to the EU.

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The Labour, Lib Dem, Green and some pro-EU Tory MPs say May has no mandate for the “extreme Brexit” options speech she made last Tuesday – including the adoption of World Trade Organisation (WTO) tariffs if the UK cannot strike a free-trade deal with the EU within two years. They are now co-operating to try to prevent this.

News of cross-party talks comes as MPs prepare for a verdict on Tuesday from the supreme court on whether ministers or parliament have the legal authority to trigger Brexit. If the 11 justices say the issue should be voted on in parliament, the MPs say they will seek to amend the legislation to make an extreme Brexit option impossible.

In a further sign that pressure is building to soften the Brexit plans, 43 Labour MPs, frustrated by their own party leader Jeremy Corbyn’s refusal to take a harder line against May on the issue, have written directly to the prime minister protesting at her plans to take the UK out of the single market and customs union, and at her willingness to default to the WTO system.

They say that while she has a mandate to take the UK out of the EU, she has no equivalent endorsement for plans that would “sail the UK economy on to the rocks”.

While few of the MPs would vote against triggering article 50, they are determined, with help from other parties including the Liberal Democrats and SNP, to build safeguards into the bill to prevent it causing serious economic damage, and the loss of employment rights for working people and environmental protection measures.

Co-ordinated by Vote Leave Watch, an organisation set up by former shadow business secretary Chuka Umunna, the letter has been signed by two current Labour frontbenchers, eight former shadow cabinet ministers and ex-deputy leader Harriet Harman.

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The MPs tell May that resorting to WTO tariffs would be devastating. “These would include 10% on cars, 12% on many items of clothing, and 40% on lamb. British manufacturers and farmers would face being priced out of their most important market, which buys 44% of all our exports. Businesses large and small in our constituencies would suffer, jobs would be lost and prices in the shops would rise.” They add: “Working people, including millions who voted to Leave the EU, would pay the price. Your government has a mandate to take us out of the EU but you have no mandate to do this.”

Former deputy prime minister Nick Clegg said he had been talking to MPs from other parties about how to gather support for amendments. “Because the situation is so serious we are condemned to work together on amendments that we can all support,” Clegg said.

Former cabinet minister Yvette Cooper, who now chairs the home affairs select committee, said she had also been talking to MPs from other parties as well as other select committee chairs on how to soften Brexit plans.

Labour MP Chris Leslie, a former minister who signed the letter to May, said he had been drawing up potential amendments to the article 50 bill which he hoped other parties would back. “This is the last meaningful opportunity parliament will have to exert leverage on the prime minister’s negotiation, so we mustn’t let it pass and give her carte blanche for a hard Brexit plan. If that means MPs working across the party divides from the backbenches and amending the article 50 bill to avoid the cliff-edge and salvage single market participation, then so be it.”

An SNP spokesperson said: “We are determined to protect Scotland from the disaster of a hard Tory Brexit. The Westminster government has to show it is serious about exploring the objective, set out in Scotland’s Place in Europe, of keeping Scotland in the Single Market even if the rest of the UK leaves. Time is running out for the Tories to show that they are not disregarding Scotland’s voice and national interests.”

The only Green MP, Caroline Lucas, said: “It’s now more important than ever that MPs work together to prevent the PM from yanking the UK out of the single market and the customs union, with all the damage that would cause to businesses up and down the country, and to our social and environmental protections. Theresa May has no mandate to sacrifice our economy and environment on the alter of trying to restrict free movement. That was not on the ballot paper on 23 June.”

The pro-EU Tory MP Anna Soubry said that although she would vote to trigger article 50, it was vital that all options were kept open. She was happy to work together “with anyone from any party who has a sensible to plan that will keep all our options open, including that of staying in the EU” if no decent agreement could be reached.

Former Tory chancellor Kenneth Clarke told the Observer it was time for all pro-EU MPs to “abandon a bit of the tribalism in British politics”, and accused May of being muddled about the customs union. “It is high time that the pro-Europeans got their act together,” he said. “What she [May] said about the customs union was incomprehensible. Your starting point should be to understand what a customs union is.”

After May’s speech, Carlos Ghosn said Nissan would have to review the competitiveness of its site after a Brexit deal had been implemented.

Its future had appeared assured after the firm committed to begin production of more than 600,000 cars a year after receiving a “letter of comfort” from business secretary Greg Clark in October.

Text of letter sent by Labour MPs to Theresa May

Dear Prime Minister,

On Tuesday, you announced your intention to pull Britain out of the single market and to seek a free-trade agreement with the European Union instead. Other nations like Norway and Iceland are not in the EU yet opted to be part of the single market because of the huge benefits it brings. But before negotiations have even begun, you have discarded our membership of the largest and most sophisticated trading zone in the world. You start a negotiation by aiming for the best deal you can possibly get; not by throwing in the towel and waving the white flag as you have done.

Even more worrying, you said Britain could leave the EU without any form of future trading arrangement being agreed. This is a threat that places Britain’s prosperity below matters of internal Tory party management. Managing expectations ahead of the start of talks may be smart internal party politics, but it could sail the UK economy on to the rocks.

Leaving without a deal would immediately impose tariffs on exports from the UK to the EU, as we would move on to World Trade Organisation tariff schedules. These would include 10% on cars, 12% on many items of clothing, and 40% on lamb.

British manufacturers and farmers would face being priced out of their most important market, which buys 44% of all our exports. Businesses large and small in our constituencies would suffer, jobs would be lost and prices in the shops would rise.

You say that “no deal for Britain is better than a bad deal for Britain” as if you will bear no responsibility for such an outcome. You may try to scapegoat the EU or the civil service, but you are the prime minister. Those of your ministers who campaigned to leave promised that Britain would achieve a free-trade agreement post-Brexit, and you have signed up to their agenda. If the negotiation goes wrong and all we can get is a “bad deal” with the European Union, you and your cabinet will be responsible.

Your threat to our European partners – to leave “the mainstream of European economic and social thinking” in order to “regain competitiveness” – is both diplomatic nonsense and a real danger to the living standards of working people.

It is a nonsense because the United Kingdom would have much more to lose from a trade war than the European Union. They buy 44% of our exports, while we buy just 7% of theirs. In a negotiation, the smaller partner gets what it wants through subtlety and goodwill – not bluster and hollow threats.

It is a danger to working people because we all know what Tory politicians mean by “regaining competitiveness”: tax cuts for the rich, paid for by slashing public services, and a bonfire of employment rights and environmental protections. Your words about a Britain that “protects and enhances” workers’ rights are just that – words. You have yet to guarantee all the employment rights delivered by our EU membership will be maintained.

Members of your cabinet have already made clear your party’s desired direction of travel: Liam Fox has called the laws that protect our rights at work “intellectually unsustainable”, and Priti Patel said employment regulations should be halved.

So, the approach to Brexit outlined in your speech is clear: it is one of self-harm, not statesmanship. Devastating our trade by leaving without a deal, and then making Britain the sweatshop of Europe, would be a disaster for our country. Working people, including millions who voted to leave the EU, would pay the price. Your government has a mandate to take us out of the EU, but you have no mandate to do this.